Mindanao’s budget share: from PhP 615-B in 2018 to PhP 585-B in 2019

DAVAO CITY (MindaNews / 01 Sept) — Mindanao’s share from the PhP 3.757 trillion proposed national budget for 2019 is PhP 585.851 billion or 4.7% lower than the 2018 share of PhP 615 billion, due to government’s “budget reforms,” data from the Department of Budget and Management (DBM) showed.

The data, released by the National Economic Development Authority (NEDA) 11 during a press briefing on Friday, showed the shares of Visayas and Luzon also decreased by 4.3% and 2.1%, respectively, except for the National Capital Region which will receive 2.1% more than the 2018 allocation.

Mindanao’s share in the national budget rose to 12.4% from 2017 to 2018 and 15.6% from 2018 to 2019 but in terms of amount, the 2019 budget is lower by 29.1 billion pesos for 2019.

Of the island’s six regions, the Davao region will have the highest allocation of PhP 127 billion while the Autonomous Region in Muslim Mindanao (ARMM), the country’s poorest region, will have the lowest at PhP 76.5-B. Northern Mindanao will have the second highest share at PhP 121.9-B followed by Zamboanga Peninsula, PhP 88.4-B; Soccsksargen, PhP 87.5-B and Caraga, PhP 84.4-B.

“With more infra programs proposed by RDC 11 (Regional Development Council), we expect a bigger share out of the national pie. We are working closely with implementing agencies to identify the priorities for this region and we will need to develop our infrastructure and utilities sector,” NEDA 11 director Maria Lourdes Lim said.

Still small

Dr. Adrian Tamayo, public relations chief of the Mindanao Development Authority (MinDA) said in a text message that 15.6% share in the national budget pie is still small because Mindanao’s rightful share should be at least 20%.

Tamayo explained that government should allocate a higher budget for Mindanao because poverty incidence is higher and there is a “need to increase budget share to reverse the poverty trend.”

He said infrastructure development such as road development in Mindanao accounts for only 64% when more road projects are needed to interlink and connect areas in Mindanao.

Tamayo noted that out of 75 “Build, Build, Build” projects lined up nationwide, only 16 are in Mindanao.

“The current Mindanao share of 15.6% is like a consolation from the 11% to 12% historical share of Mindanao. It will only perpetuate the regional disparities at the cost of Mindanao and its future,” Tamayo said.

To compensate for the 4.4% that would complete the proposed 20% share, Tamayo urged agencies like the Department of Transportation (DOTr), Department of Information and Communications Technlogy (DICT), and Department of Trade and Industry to realign line item budget for Mindanao.

He said the 20% increase in the national budget pie will basically mean a catch-up budget so that “Mindanao will grow at expected economic size it has to be.”

“It means Mindanao allowing Mindanao to catch up with inter connectivity by railways, digital opportunities and trade and commerce,” he said.

Budget reforms

Lim also explained the decrease of 29.1 billion pesos in 2019 compared with the 2018 budget is due to the budget reforms undertaken by the DBM that seek to modernize the public budgeting for fiscal year 2019, from the obligation-based budgeting to cash-based budgeting.

“What we mean when we say cash-based budgeting is we all want to see projects included in the national expenditure program that are ‘shovel-ready’ or those that can be implemented immediately,” she said.

The implementing agencies must have accomplished the requisites, for instance, acquisition of right of way, clearances, feasibility studies, detailed engineering design, and endorsements from the local and regional development councils, Lim added.

The multi-year obligation-based budgeting system would include the projects in the national expenditure program even without the complete supporting documents, she said.

Lim explained that under the existing obligation-based budgeting system, implementing agencies are given two years to utilize the budget for the projects while under the cash-based system, they would be compelled to immediately utilize the funds within one year.

She said the absorptive capacity of the implementing agency should be strengthened or “you will lose your funds back to the national treasury because you do not have the capability in the first place to implement these projects that are shovel-ready.”

A briefer from the DBM said the budget reform was intended to ramp up the country’s economic growth rate from 7% in 2018 to 8% in 2022, pushing the country into upper-middle income status by 2022, while reducing poverty incidence from 21.6% in 2015 to 14% in 2022.

It added agencies can transition to cash-based budgeting by planning well and early projects; propose projects that are ready for implementation; early procurement must be the rule; and formulate a procurement strategy.

“A multi-year planning perspective is even more significant now that the time horizon of the national budget has shortened. Program managers should have a clear plan on their targets in the medium term and the necessary resources to attain these,” it said.

It added agencies are encouraged to practice an increased discipline in managing their budgetary resources, and to carry out forward planning and risk management in proposing and implementing an annual cash-based budget.

It said in order to deliver a 12-month contract within the fiscal year, agencies should prepare budget proposals with a clear intent to conduct Early Procurement after the Executive has submitted the National Expenditure Program (NEP) to Congress.

“This way, 12-month contracts can be awarded within January of the fiscal year,” it added. (Antonio L. Colina IV / MindaNews)